Income Tax Notice: Taxpayers should know that the Income Tax Department now keeps a close watch on every small and big cash transaction. In such a situation, if you are making a big transaction in cash, then there should be a source of it because if any discrepancy is found, you may get a notice from the Income Tax Department.
Taxpayers, pay attention. Do not do anything that may make you face a notice from the Income Tax Department. If you fall under the purview of tax, then pay it on time because the Income Tax Department never spares the tax evader. The Income Tax Department keeps an eye on both digital and cash transactions of such people.
Banking transactions are checked very closely to catch the difference in the income and expenditure of such people. Tools like data analytics and artificial intelligence are also used for this work. If a big difference is found in your income and expenditure during investigation, then the department can send you a notice. Today we are telling you about five such cash transactions done in a financial year, due to which you can get an Income Tax notice.
1. You will have to tell the source of this much money in the savings account
If you have deposited Rs 10 lakh or more in cash in your savings account in a financial year, then the bank gives this information to the Income Tax Department. Even if you have deposited this money in the same bank account or in many accounts. The Income Tax Department can ask you about the source of this money. Although this does not mean that you have evaded tax, but if you are unable to give correct information about the source of this money, then you may have to pay a fine.
2. Income Tax Notice on FD
If you have made an FD i.e. fixed deposit of more than Rs 10 lakh in a financial year, then you may be at risk of getting an Income Tax notice. If you have made FDs in many banks and the total amount is more than Rs 10 lakh, then the Income Tax Department will definitely ask you about the source of this money by sending a notice. Action can also be taken against you for not giving the correct information, so you should have complete information about the source of this money.
3. Cash payment while buying property
If you buy a property worth Rs 30 lakh or more by making a cash payment, the property department informs the tax authority. You will have to tell the source of this money. If you have made a cash payment for the property and have not told its source correctly, then the Income Tax Department can take strict action against you.
4. Cash investment in shares, mutual funds and bonds
If you have bought mutual funds, debentures and bonds worth Rs 10 lakh or more in a financial year, then be careful, you may get a notice from the Income Tax Department. If a big difference is found in your income and investment, an investigation can be done. Because there is no digital record of investment in cash.
5. On paying credit card bills in cash
If you pay a credit card bill of Rs 1 lakh or more in cash every month, then this transaction also goes into the records of the Income Tax Department. You may not get a notice initially, but if you do this repeatedly, then the Income Tax Department may ask you where did you get so much cash from. In such a situation, you should make big transactions only through digital mode. You may get a notice from the Income Tax Department on purchase of foreign currency of Rs 10 lakh or more (which includes traveler’s cheques and foreign currency cards, debit or credit cards).
